Valuation of The Portuguese Real Estate Market: An Empirical Analysis

Year 2020, Volume: 5 Issue: 2, 82 - 90, 27.12.2020

Gualter Couto Pedro Pimentel Carla Oliveira Rui Castanho

Abstract

The contribution of real options analysis on the valuation of Portuguese undeveloped building sites is significant on the decision making regarding the apartment-buildings construction. Using the options model developed by Quigg (1993), and including the necessary readjustments for the Portuguese market, it was found that the scale price elasticity parameter and construction expenditures’ elasticity of scale parameter had a strong impact on building sites’ values. The empirical analysis revealed that the option to defer adds value to undeveloped building sites’ valuations. This fact cannot be ignored when deciding upon an investment’s implementation.

Keywords

Real options, real estate, optimal timing

Supporting Institution

FCT – Fundação para a Ciência e a Tecnologia

Project Number

UIDB/ECO/00685/2020

Thanks

This paper is financed by Portuguese national funds through FCT – Fundação para a Ciência e a Tecnologia, I.P., project number UIDB/ECO/00685/2020

Portekiz Gayrimenkul Pazarının Değerlendirilmesi: Ampirik Bir Analiz

Abstract

Portekiz'deki gelişmemiş şantiyelerin değerlemesine reel opsiyon analizinin katkısı, apartman inşasına ilişkin karar vermede önemlidir. Quigg (1993) tarafından geliştirilen ve Portekiz pazarı için gerekli yeniden düzenlemeleri içeren opsiyon modelini kullanarak, ölçek fiyat esnekliği parametresi ve inşaat harcamalarının ölçek esnekliği parametresinin şantiye değerlerinde güçlü bir etkiye sahip olduğu bulundu. Ampirik analiz, erteleme seçeneğinin gelişmemiş inşaat alanlarının değerlemelerini artırdığını ortaya çıkarmıştır. Bir yatırımın uygulanmasına karar verirken bu durum göz ardı edilmemelidir.

Keywords

Reel opsiyon, Emlak, Optimal Zamanlama

Project Number

UIDB/ECO/00685/2020

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